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12/11/2013

IDC Government Insights Predicts Total IT Security Spending for US Federal Government to Top $6.1 Billion in 2014

FRAMINGHAM, Mass., December 11, 2013 – IDC Government Insights today announced two new reports. The first is titled, “Business Strategy: U.S. Federal Government IT Security Spending Forecast and Market Outlook,” (Document #GI244554). The new report offers a U.S. federal IT security forecast through 2017 plus breakouts, by agency, of the major IT security initiatives currently underway. It also looks at how IT security elements within government offices can be significantly different than what is seen in other industries — because of the need for physical and national security. According to the new report, overall IT security spending will rise from $5.9 billion in 2012 to over $7.3 billion in 2017. Overall security spending has been trickling upward at an average rate of about 4% per year, and based on the new report, this slow steady increase shows no signs of abating.

While federal IT security spending continues to climb, the expansion is not universal. Different agencies are investing in IT security at different rates, and most have distinct focuses — depending on their existing legacy systems and what they need to improve. According to Shawn P. McCarthy, research director, IDC Government Insights, "At this time, many agencies are reviewing how their move to cloud-based solutions might affect their overall IT security posture and many are finding that unified threat management solutions are becoming increasingly popular. In fact, we anticipate that federal UTM spending will rise from $213.8 million in 2012 to over $541.4 million in 2017.”

Additional key findings include:

Most IT security spending goes toward staff salaries. This is because security scanning and proactive mitigation efforts still have a heavy manual component, with people needed to set configuration and to make decisions when threats are detected. Most years staff salaries account for between 85% and 91% of total spending.

The Office of Management and Budget (OMB) tracks two broad categories of IT security spending — money spent strictly on IT security versus money spent on the IT elements of larger physical and nation security efforts. The government needs both types of IT spending to maintain an effective security posture. While the latter group is not traditional information security spending as IDC defines it in taxonomy documents, it is often listed as security related when it is mentioned in government IT budgets. For that reason, IDC Government Insights has included details on both types of security budgets, including a five-year forecast for both types of security spending.

IDC Government Insights expects to see steady long-term growth for security spending between now and 2017, with staffing growing to $6.2 billion by 2017, firewall spending growing to $249.6 million, unified threat management growing to $541.4 million, intrusion detection and prevention growing to $226.3 million, and virtual private network spending growing to $80.9 million. Right now, about 40% of IT staffing for security management goes to contractors. IDC Government Insights expects to see that grow to about 60% by 2017, as more government IT services move into the cloud.

U.S Intelligence Budget Landscape

In addition, IDC Government Insights has announced a second new report, “Perspective: The U.S. Intelligence Budget Landscape – With IT Segmentation and Budget Forecast,” (Document #GI244777). According to published sources, the U.S. intelligence budget for FY13 was set at $52.3 billion, with an additional $400 million in spending across other government agencies, which require some level of interaction of data sharing with the intelligence community. While a total of $52.6 billion often is quoted as the total black intelligence budget, this new report mainly addresses the $52.3 billion that was outlined in available documents.

According to the report, many government agencies spend an average of 4.5% to 6.7% of their total annual budget on IT solutions. Intelligence agencies tend to have a higher need for computing solutions, which prompts many of them to spend over 15% of their annual budgets on different types of information technology or data gathering technologies. For an organization such as the National Security Agency, which is focused heavily on signal intelligence, communications, and data analysis that percentage can climb to over 30%.

Key highlights include:

On average, IDC Government Insights calculates that about 22.5% of the black intelligence budget is targeted at various types of IT solutions.

Overall intelligence spending is expected to rise about $9.5 billion (18.8%) between 2013 and 2017.

The IT portion of the overall intelligence spending is expected to grow by up to 33.6%. Much of this will go toward additional data collection technologies and flexible large-scale computing platforms.

Spending by the CIA is the largest of any spy agency, with $14.8 billion requested for 2013. That's nearly 70% higher than the next largest intelligence agency, the National Security Agency.

Counterterrorism programs account for about 25% of the members of the intelligence workforce. These programs also represent about 33% of all intelligence spending.

Author of the report, Shawn McCarthy asserts, "U.S. intelligence agencies face the same pressures as other federal agencies — to consolidate systems, to take advantage of cloud-based solutions or shared services when possible, and to use new technologies to improve and accelerate data processing. And while many intelligence agencies have long been chief consumers of supercomputing power, the newer styles of flexible multiprocessing are driving new rapidly scaling IT operating at a variety of facilities. With their evolving focus on global data collection for international operations, intelligence agencies will be dealing with more data than ever before while integrating new solutions capable of handling that data. For this reason, we expect IT spending to continue at these agencies."

To arrange a one-on-one briefing with Shawn McCarthy, please contact Sarah Murray at 781-378-2674 or sarah@attunecommunications.com. Reports are available to qualified members of the media. For information on purchasing reports, contact insights@idc.com; reporters should email sarah@attunecommunications.com.

About IDC Government Insights

IDC Government Insights assists government policy, program, and IT leaders, as well as the suppliers who serve them, in making more effective technology decisions by providing accurate, timely, and insightful fact-based research and consulting services. Staffed by senior analysts with decades of government and IT industry experience, our global research analyzes and advises on business and technology issues facing the Federal/Central and local/provincial Governments. International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology market. IDC is a subsidiary of IDG, the world’s leading technology, media, research, and events company. For more information, please visit www.idc-gi.com, email info@idc-gi.com, or call 703-485-8300. Visit the IDC Government Insights Community at http://idc-insights-community.com/government.